Monday, December 8, 2014

Quantifying Economic Uncertainty

A lot of casual opinion suggests that there’s more economic uncertainty since Obama took office, and that this is influencing managers’ decisions, and may help explain macroeconomic weakness.

Well, if uncertainty is any measure, we’ve been in crisis for 6 years:


In the past, I’ve been non-committal about this issue. But now that I have found this data set, I think it provides fairly concrete evidence that D.C. has created problems for all of us.

Note that the two biggest spikes before the last 6 years are the taller one for 9/11, and the somewhat smaller one leading up to the invasion of Iraq in 2003.

And that hump in the early 1990’s? That the first Persian Gulf War, with a peak in fall 1992 … when it became apparent that the president who’d racked up the highest approval ratings in history was somehow going to lose the election.

Folks, there is no test for causality here, but I’d sure like to see someone in D.C. experiment with reducing the level of uncertainty, and then following up by an examination of productivity several years later.

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